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China Ramps Up WTO Fight With U.S. Over Methodology In CVD Cases

May 20, 2016

China has moved to escalate the fight over what it claims are "unlawful" standards and methodologies the U.S. applies in countervailing duty investigations with China in violation of the Agreement on Subsidies and Countervailing Measures by failing to live up to a 2014 Appellate Body ruling, according to a May 13 consultation request.

China's consultation request regarding the U.S. compliance with that ruling is 18 pages long and covers 15 CVD cases that the Commerce Department initiated between 2007 and 2012. It was delivered three days after the Obama administration challenged China's compliance with a Aug. 2, 2013 panel report that faulted Beijing's AD/CVD duties on certain U.S. chicken products (Inside U.S. Trade, May 13).

China launched the original challenge of U.S. CVD methodology in 2012 on cases that covered a range of products, including solar panels. The U.S. faced a compliance deadline of April 1 this year that ended a fourteen and a half month compliance period.

In mid-April it became clear that the case was heading for compliance litigation, when the two sides negotiated a sequencing agreement on the ground rules and timelines for such a process.

China's consultation request faults the U.S. for non-compliance in two ways. First, it claims the U.S. has not completed the implementation process for all 15 cases by the April 1 deadline. This refers to four cases covering Chinese imports of solar panels, pressure pipes, steel line pipes, and oil country tubular goods (OCTG), for which the U.S. has only made preliminary redeterminations.

Second, China claims that the U.S. implementation of the Appellate Body ruling in its final and preliminary determinations still does not comply with the ASCM. This claim refers to eight cases that have been implemented and two for which Commerce has issued final redeterminations that have not yet been implemented.